I'm going to speak about NJ because you are in NJ. In NJ it is NOT ethical for the listing agent to reveal anything to the buyer or buyer's agent without the express permission of the seller. This is an ethics violation. Please read the Consumer Information Statement that your listing agent should have provided you.
So if the seller says to the listing agent. "I know my house is listed at 200k, but I'll take 190k and not a penny less" it is not ethical for the listing agent to divulge that without first asking the seller. If you're a seller, you have very valid reasons for guarding your motivations to sell. Why? The buyer's agent, if they're good, will try to ascertain the reason for selling, share that with the buyer and this may result in a lower offer to the seller. This is one reason I counsel my sellers to leave the home, if possible, during showings -- I caution them that if they must stay, they should not get into any casual conversation with the buyer's agent wherein they might divulge something that will weaken their negotiating position.
Even if my seller tells me, "You can tell them I won't take any offer lower than "x"; I will still counsel my seller that "You may not want me to say that. Why? Because then all they'll offer is "x" when maybe you could've gotten "x+5,000". Take it from me, someone who used to work in the cutthroat world of Manhatten's major-label music industry, It's best not to say anything and just let the negotiations play out and see where they lead. Remember, in negotiations, he who blinks first, or breaks the silence, usually loses -- so why would you want to start off giving the other party ANY information???
I hope that this answers your question! If you've found it to be helpful, please click the thumbs-up icon below!
Best Wishes to you, Annie!
Kimberly Thomas, Broker-Associate
Realty Executives Brown & Pope
One key element is the sellers instructions to the listing agent, however, the agent cannot lie, cheat or be dishonest just because the seller instructed them so.... I mean, we're not lawyers :-) haha only kidding. Another element is to consider if the agent's response is in the seller's best interests... and that is very subjective. If the listing agent's response encourages the buyer to make an offer, make a better offer or even to dissuade them from making a ridiculously unacceptable offer, one could argue that IS in the sellers best interests. Of course, you could argue the opposite just as well.... some might say the only acceptable response on the price is to quote the List price, unless you have authorization from the seller otherwise.
One solution to this problem is to avoid dual agency in the first place... if you're the buyer, get your own agent and don't deal with the listing agent. If you're the seller, give your listing agent specific instructions (written if necessary) on how you want price discussions handled.
I hope that's helpful... if so, click the "thumbs up" below,
Joe Montenigro REMAX Home Team
Broker, GRI (856)374-2800 x106
Serving Gloucester Twp, Washington Twp & South Jersey Real Estate Markets
Read my Blog at http://hometeamNJ.com/blog
There is absolutely nothing wrong with saying, if asked if there have been any offers, to say "yes there have been 2, but they were declined as too low" if that is truly the case. However, disclosing the amount is not approprtiate.
Let me add just one other thing.
Even though a seller may have rejected a previous offer of X--let's say $400,000--doesn't mean that another potential buyer shouldn't or couldn't offer $400,000, or even $375,000 or so. People's needs and perspectives change. I've seen a lot of times where an offer comes in fairly early in the listing process that's a bit low, but not unreasonable. The seller rejects it. Then there aren't any other offers, or any subsequent offers are even lower. And the seller says, "Gee, I really should have taken that first offer."
As noted below, if the seller specifically says, "Don't show me any offers below $425,000," then your offer of $390,000 won't get presented. But, if there's no such direction from the seller, then your offer must be presented.
So, the answers below address the ethics aspect. As for what to do if informed that a seller rejected a previous offer at a specific price, my advice is: Determine what the house is worth. Offer no more than that. But don't worry about offering less. And pay very little attention to what a seller may have done weeks or months earlier.
Hope that helps.
If the listing agent has direct orders from their seller not to bring them an offer under "x" amount of dollars then the listing agent has a duty to abide by the seller's wishes. That said, we are obligated not to take matters into our own hands and make the decision as to whether or not we should present an offer!
As far as obtaining your own agent, be very careful here. In my state there is something called "procuring cause". Depending on how you came upon this home is what would determine whether or not the listing agent has procuring cause. If he/she does, and you now bring in your agent, you could potentially be charged by both agents.
Just a word of caution.
Communicate in writing with a deadline and put money in front of them. Can;t catch a mouse without the bait. Dangle the cheese in front of them. But if they can;t go lower then you may have to walk. Hopefully not too much was conveyed between the agents. Present the offer and shut up. Make a deadline and dont get emotionally attached. I know its hard but set your mind. when offering a lower price you have to realize it ma not work. In fact I prepare my buyer clients to mentally get ready to walk, nothing is done until its written and under contract. Dont leave anything for chance. Act fast and diligent.
Search all bank owned homes Free: http://www.foreclosuresfornewjersey.com
The ethical issues usually center around whether the agent is representing the seller or themselves in the discussion.
So, if the Seller has told the agent, "let these meshuggah buyers know, I had an offer for x and I tore it up right in their face," the agent is acting ethically in telling you this.
This doesn't preclude you for writing up a ridiculously low offer, and the agent is legally obliged to deliver that offer to the seller, even they need to wear a haz-mat suit when doing so, and even if the offer is safely encased in a hermetically-sealed bag.
Now, if the Seller told the agent no such thing, and the Seller finds out . . .
If the seller has instructed his or her agent to do so, then it is legal. I have had sellers that have instructed me to tell any potential buyer that they will not accept less than $^&^& for their property. This would take place between agents as a rule. If we are in the middle of a counter and the seller says, "tell them my final offer is "x" amount and then the other agent says to me that their buyer is thinking of writing a counter for "x" amount, then this would be appropriate for me to tell them this information.
However, without knowing exactly what transpired, and from this limited information, it is difficult to give you a complete answer. You may have been thinking of offering a higher price than what you were told and that could present a problem, but without more details, I cannot say.
I really hope this help, Anne. If you need more explanation feel free to give me a call- 856-397-7812
Every offer is different, even the offer price is the same, the contingencies may differ. Telling buyer not to offer under X dollar amount will not benefit seller. You should encourage buyers to submit offer, and review every offer closely.
Despite the fact that this is a buyers market, a seller can remain in control of the offer process; i.e.advising the agent he/she (1) has rejected a previous offer at ??? or (2) not want the listing agent to advise them of anything less than ???.
Most recently, I had a seller indicate that she would not entertain anything less than ??, I had turn turn away multple potential buyers whose agents had planned on offering less than ??. Howeer, I did keep track and advise the seller of the number of agents/prospects I had to turn away due to this edict. When I did receive an initial offer that was close to the seller's edict, I did feel obligated to present that offer and in light of current market conditons advise the seller to seriously consider the offer that was close to their edict. The result being a property under contract . . . sometimes the carrying cost can outweight a nominal different in seller expecations.
Francesca Patrizio, ePro, SRES
Coldwell Banker Residential Brokerage
Talking about a prior offer is not a breech of confidiality. Let me give you an example. Say that I have a listing that had an offer that the seller has declined. Another agent calls me who had recently showed the property and is telling me that their buyer is interested in presenting an offer and they tell me that they really want a deal and they are going to offer 30,000 under the asking price. The offer that was turned down was 20,000 under asking, so after running it by the seller, I call them back and tell them that they really need to sharpen their pencil if they really want the property. There is no breech here. However, it did save some time and paper.
Debbie Albert, PA
As a listing agent if a buyers agent contacts me states their buyer will be submitting an offer AND include in our private remarks low ball offers will be immediately declined, We have it in our listing agreement with property owners if the offer is not $xxx,xxx and above their preference not to be bothered.
We have them sign a statement where we return it to the buyers agent
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
I agree, Kim's answer is the best--you definitely need to have the permission of the seller to divulge that information but, as she advises her sellers, why WOULD you show your cards? It's always best to let the negotiations go through the natural process--we oftentimes learn something about the buyers that we can get an even better price. For example, many buyer present their pre-qualification letter from the lender with their maximum amount that they can finance--it can sometimes be significantly higher than even the list price on the home. Well, my sellers know that they can pay full price so, why not push for that in the negotiations! We now know how hard we can push!
The only time it is ethical is when the seller informs the listing agent that because they rejected this offer let any prospective buyers know that if you are X or less I am not considering it.
the agent can in no way reveal such information unless SPECIFICALLY instructed to do so by the seller. The listing agent is working for the seller not the buyers.
It is really up to what the seller has instructed their listing agent to do. Many sellers allow their listing agent to disclose that they will not consider any low ball offers below a cetain dollar amount & have their permission to share that with others. However by law a listing agent has to present all written offers . So as a buyer if your buyers agent is telling you the listing agent said the seller declined offer X & that you need to offer higher you can do 2 things. Make a higher offer or insist that they present your offer anyway. You may get lucky & the seller may reconsider taking a lesser amount at this point in time. You have nothing to lose & you can always increase your offer.
If the agent knows they refused a certain dollar amount, it will only benefit the buyers' agent, too. It acts as a starting ground for any subsequent offers.
It would be perfectly fine if the seller instructed his agent to tell any buyers that he wants only an offer higher than a prior offer, or higher than any particular number. However, even if this is true, you still have the right to make your offer anyway and the listing agent still has to present it. So review the market with your agent, and make a reasonable offer based on that data. If that's not good enough for the seller, then move on to another home.
Actually you should not be dealing with the listing agent at all, and you should not be discussing verbal offers with the listing agent. You should be presenting your offer in writing through your buyers agent only.
Never deal with a listing agent, always use your own agent. The listing agent is your adversary and is acting in the best interests of the seller. And never consent to dual agency. Always retain your own agent who represent your interests and your interests alone. It is unethical for an agent to attempt to represent both sides of a real estate transaction, even though the law allows it. So don't fall into that trap.
Buyers need to educate themselves to never call on a yard sign or an Internet or newspaper ad. Always have your agent make that call. You don't want to be dealing with the listing agent who is by definition your adversary.
Century 21 Joe Tekula Realtors
Phone (direct): (973) 584-4235
Linda B. Conner-Realtor
Prudential Fox & Roach
Northfield Home Marketing Center, NJ
Serving Atlantic and Cape May Counties
cell: 609-369-2739 fax: 609-677-4477
Who's the next person you know planning to buy or sell?
Call me & I'll take great care of them!
There is nothing unethical about telling the truth. The Listing Agent should do whatever his client instructs him to do. However, if you are the Seller, you probably want to see all offers.
By the way, if you are the Buyer hopefully you have your own agent looking out for your best interests